Dollar/Yen Holds Longest Gains Since 2005
There are more signs emerging that the U.S economy is strengthening particularly now that it seems the dollar has enjoyed its biggest monthly gain versus the Euro since February last year.Throughout July the dollar rose against all of its 16 major counterparts as reports have shown gross domestic product rebounded, improvements in consumer confidence and orders for durable goods increased. Furthermore, it is widely predicted that the NFP data due to be released today will show that employers added more than 200,000 jobs for a sixth consecutive month.
Over the last few days there has been little change in the dollar; it stuck around $1.3396 per Euro having advanced 2.2% this month. On July 30th it appreciated to $1.3367, the strongest since November 12. Having risen for nine straight trading days, the dollar was trading at 102.78 yen from 102.79.
However, as of yet there has been no sign that interest rates will be raised by the Federal Reserve System. A few days ago the Federal Reserve delivered a more positive assessment of the economy and, as was wildly expected, it scaled back its monthly bond-buying program by another $10 billion.
After last month’s data became available, one analyst said, “The dollar is at the beginning of an uptrend versus the euro and yen. The market is getting increasingly hawkish about US rates. Short-term forward expectations of Fed policy have been moving forward quite steadily.”